WASHINGTON - The Bush administration said
on May 18 that it will impose new restrictions on
clothing imports from China, escalating trade
relations between Washington and Beijing that have
already grown tense during the past week.

In a late afternoon statement, the US
Commerce Department said that it would place
"safeguard" restrictions on four types of goods
from China: men's and boys' cotton and man-made
fiber shirts, man-made fiber knit shirts and
blouses, man-made fiber trousers, and combed
cotton yard. Last Friday, the administration
announced that it plans to place similar limits on
imports of Chinese cotton trousers, cotton shirts,
and man-made fiber underwear.

American
textile manufactures have complained that since
global trade rules were changed on January 1,
imports of Chinese goods have disrupted US
markets, surging by as much as 1,500% in some
cases. "We will enforce our trade agreements to
ensure that US companies get a fair deal as they
compete in the global marketplace," said Commerce
Secretary Carlos Gutierrez in a statement placed
on the department's website Wednesday.

The
proposed quotas - permissible under the rules of
the World Trade Organization - would limit growth
in Chinese imports of the affected goods to 7.5%
above the level they had reached the previous
year. The quotas will not go into effect until the
US formally consults with China on the matter,
which must be done within the next 30 days.

The Chinese Embassy did not return calls
for comment on Wednesday. However, Chinese
Minister of Commerce Bo Xilai, speaking in
Beijing, said the textile limits are "unfair",
according to the embassy's website. Bo said the US
and the European Union, which has also urged China
to curb its textile exports, should have gradually
phased out their quota systems over a 10-year
period, as outlined during WTO talks in 1995.
"[The US and EU have] kept 70-90% of their most
important quotas in place till the end of last
year," Bo said. "Their activity caused the
short-term rapid growth of China's textile exports
in the first several months this year." According
to news reports, Beijing has said it will fight
the proposed limits on its textiles exports.

Laura E Jones, executive director of the
United States Association of Importers of Textiles
and Apparel, a trade group, called the
administration's decision "absurd," adding, "the
truth of the matter is, it won't bring any jobs
back," she said in an interview Wednesday. Jones
said she believes the Bush administration has
specifically singled out the Chinese because
"they're threatening to a lot of people in the
Unites States".

US manufacturing groups,
however, hailed the proposed import restrictions.
"Failure to act would have cost tens of thousands
of US jobs," said Auggie Tantillo, executive
director of the American Manufacturing Trade
Action Coalition, in a statement released
Wednesday.

Underscoring the trade tension
is a dispute over currency policy, in which the
yuan is pegged to the dollar. American critics of
this fixed exchange rate system argue that the
yuan is valued too low, making Chinese goods less
expensive in American markets. Advocates of the
exchange rate say that allowing the yuan to
appreciate could cause monetary instability in
China and could allow the dollar to depreciate
even further, thus paving the way for higher
interest rates.

On May 17, US Treasury
Secretary John Snow sharply criticized China's
currency policy, arguing that it distorts world
trade, but stopped short of accusing China of
manipulating its currency. Several Congressmen
have threatened to levy high tariffs on Chinese
imports if Beijing does not allow the yuan to
appreciate, and a Senate bill is under
consideration which would slap a 27.5% tariff on
all Chinese exports to the US if China does not
revalue within six months of the bill's passage, a
time lapse intended to allow further negotiation
with Beijing.